self-storage vs. external storage

Find the advantages and disadvantages of self-storage and external storage.

To storage in your own warehouse is when the building and all the technical equipment of the warehouse is owned by your company. This type of storage offers advantages when it comes to particularly high-quality goods. The less external persons come into contact with the goods the lower is the loss risk. Furthermore it makes sense to store goods by yourself that require special expertise in storage, or special equipment is needed. With stable demand and low risk, it is advisable to resort to self-storage. A disadvantage is the investment cost and the proportion of fixed costs are causing their own camp here.


External storage can be realized without problems for items which doesn't need special requirements for storage and are not necessarily particularly valuable. Enterprises have the advantage to waive the fixed costs of a proper warehouse and only pay for the goods actually stored, or were handled. It offers itself even fluctuations in demand, uncertain markets or products in the introduction phase.


In general, we need to decide what type of storage for the company is the least expensive alternative. This is usually a classic break-even analysis is. It indicates from what quantity a self-storage or external storage is advantageous for given prices.



Self Storage

  • for goods that require special expertise in storage
  • little external persons gain access
  • stable demand
  • Market concentration
  • high storage throughput (FMCG no slow-moving)
  • direct control necessary (in the maturation process of the product)
  • Specialised equipment required


External Storage

  • fluctuating demand
  • limited storage capacity
  • Products in the implementation phase
  • Fluctuation of the markets


Into account the following cost items

  • Bearing operating costs (warehouse personnel, buildings, energy, storage technology)
  • Inventory costs (capital commitment costs, loss and risk of obsolescence)


Decision criteria

  • Investment costs
  • Running costs
  • Know-How
  • Dependence
  • Space (capacity)
  • Information flow